While you're sweating it out, you're paying for your neighbour's air-conditioning to be running. How? It's because the electricity market in Australia needs changing.

Are you one of the lucky ones with air conditioning? As we swelter through this heatwave, those that can are switching on the AC and keeping cool. Those that can't are lying semi-naked in front of fans with a wet cloth on their heads.

In the past 20 years, Australians have embraced air conditioning. In 1994, a quarter of households had it. These days more than half do.

While it's bliss to sprawl in front of the cold air, there is a serious downside to chilling out. The Productivity Commission last year said that air conditioners are largely responsible for putting the electricity network under strain and that strain costs us dearly (pdf).

On hot days, like today, we all turn on the air-con at the same time, creating a situation that the electricity companies call 'peak demand'.

The Productivity Commission said "[I]n New South Wales, peak demand events occurring for less than 40 hours per year (or less than one per cent of the time) account for around 25 per cent of retail electricity bills."

In other words, the pressure to meet peak demand has made the electricity companies over-invest in extra power stations that we rarely use. But we still wear the cost of building them on our electricity bills.

"For example," the PC's Electricity Network Regulatory Frameworks report continues, "a household running a two kilowatt (electrical input) reverse cycle air conditioner, and using it during peak times, receives an implicit subsidy equivalent of around $350 per year from other consumers who don't do this."

In effect, your sweaty neighbours without air-con are helping to pay for your comfort.

The solution, says the PC, is something called 'demand management'. It's about finding ways to reduce overall demand for electricity, but particularly during peak times so that huge sums of money are not invested in new power plants that are hardly ever switched on.

It's basically the electricity equivalent of water restrictions during a drought so a new dam doesn't need to be built.

CSIRO published a post yesterday about some demand management ideas that have been given a run. It includes an idea they call 'cost reflective pricing', which is also known as 'time of use pricing' or 'flexible pricing'. In essence, your electricity company charges you more for electricity at peak times of demand, thereby encouraging you to save your energy-intensive activities for a cheaper time of day.

Some energy retailers in Australia offer such a service, but it tends to be something that customers need to ring up and request, rather than being automatic.

I spoke with Gilles Walgenwitz, a consultant with energy efficiency firm Energetics about some other ideas too. He nominated 'voluntary curtailment' in which customers (usually commercial customers) enter into an agreement with their energy company to shut down a piece of equipment on request when peak demand hits.

There's also 'direct load control' where energy companies are given the power by customers to switch off power to various appliances during periods of peak demand.

All of these ideas have been piloted in Australia. All of them have been shown to work. However implementing them has been slower in coming. This is primarily because of the way energy companies make their money.

Energy companies either make money by charging customers for electricity or by building new infrastructure. The more electricity you use, the more likely it is that electricity companies will receive income from either of these sources.

They have very little incentive to help you save electricity.

Coupled with the popularity of solar panels, electricity companies' business models are looking unprepared for life in the 21st century.

The Productivity Commission was called in to try to suggest some ways that the energy companies of Australia could organise themselves to be better prepared for the changing market conditions.

The government at the time enthusiastically embraced the PC's recommendations, but said that a lot of them were already under consideration by Standing Council on Energy and Resources, the committee made up of Australian state energy ministers.

At the latest SCER meeting, in December 2013, the ministers announced that "While continuing to recognise the value of demand side reform, ministers agreed to request the Australian Energy Market Operator to defer lodgement of the rule change proposal and requested officials to undertake further work on DRM, including a cost benefit study, and report back to ministers at their first meeting in 2014." Which is government-ese for watch this space.

In the meantime the government launched a new look at energy policy via its white paper on energy. The paper is due in September.

As the PC report itself drily noted: "[T]he National Electricity Market has too often proved to be a graveyard for reform proposals, which then remain as inert words in dead documents."

The risk is that if the latest proposals to reform the energy market get tangled in bureaucracy the elderly, the young and the infirm will be at risk as the electricity grid struggles to cope. And the rest of us will cop higher electricity bills.

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Ursus Augustus :

21 Jan 2014 3:13:10pm

Simple answer. Forget carbon taxes and sledgehammer crap like that, make airconditiones run of a separate circuit, same as off peak systems and then charge accordingly. That will at least have people cutting back of their usage and their temperature settings. It might also encourage smaller more efficient homes.

shaggymacabre :

21 Jan 2014 3:12:44pm

This article gives us information on electricity market, as well as detailed information on smart grid, smart meter projects in the market itself. This is true not just in Australia but around the world because we are all facing similar problems,especially about smart meters. The plans they wish to happen is beneficial to others although I guess, the real solution here is no other than to take a limit on electricity consumptions whether it will be an air condition or other appliances.

New World :

19 Jan 2014 1:14:15pm

With the possibilities of temperature going up with Global Warming The need for cooling with Air Conditioners is a must. That means more power needs to be produced. Shops and Business's will install even bigger Air Conditioner units. Growth will push up power demand from the Business sector as well as the Private Sector.

It is interesting to see how much power renewables contributed to the Electricity grid over the past week or so. I expect that there would have been more wide spread brownouts except for the renewable power being supplied to the Grid.

Planning for more power supply plus the peak demand is needed.

I understand Tony Abbotts Green Paper on his Emissions Reduction Fund hopes he will get 1 000 000 homes with Solar Systems, so the grid needs to be able to incorporate renewable power being fed into the grid. All this is really very new for the Grid, and I am sure innovative people will come up with means to use renewables advantageously for the community. All New

I add again peak demand also occurs in winter. The poorer house holds with electric stoves and electric radiator style heaters cannot cut back their power use. So peak demand style pricing hurt the poorer households, more so than the people with Air Conditioners. You cannot cut people 's Electricity in Winter, for power supplies in Winter are a necessity. Pricing needs to be enough so there is enough power supply available at the peak 40 hours per year. There has to be more power available for like I said Global warming and growth which will push up power demand. Plan for the future. We are supposed to have Minister for Energy, they need to do their job in planning for sufficient power supplies for the Business's and homes at peak times.

DC :

19 Jan 2014 1:05:47pm

All these pricing options seem to ignore the basic fact that Peak Demand requires massive investment in infrastructure that is currently not fairly shared by all consumers. It is not just the cost of consumed electricity in a peak period that should go up, but the Daily Supply charge for each consumer should vary depending on their Peak consumption requirements.

As an example, why should one household who only ever consumes ~1 kWh Peak pay the same daily infrastructure cost as another household that consumes 3+ kWh of Peak consumption? It just isn't fair and should be reflected in the overall costs of supply infrastructure.

Gary Dean of Brisneyland :

A Radford :

18 Jan 2014 11:46:42am

Need a peak demand power source?Maybe in the next few years local residents can use up to say 50% of the 18kwh of storage in my blade electric car. CSIRO are currently testing a smart charger/inverter that can do this.I hope to use off peak power to supply peak demand.The same should be possible with battery banks.This depends on when the grid becomes smart, and how long the payback period would be to upgrade to a smart charger.. take up of electric cars and battery storage.Large storage for the grid may be a cheaper option than more feeder lines and power stations. An article discussing this can be found on the clean energy council website.

Blzbob :

17 Jan 2014 4:48:18pm

Power should be sold on a quota basis, calculated on the number of people who reside in the dwelling.and increasing as they exceed stage of their share.this would also encourage people to share as the cost of cooling a house for multiple occupants would be less that cooling a whole house for one.

Mimenta :

17 Jan 2014 3:04:08pm

Here in Victoria we were made to accept smart meters, which gives electricity suppliers the ability to meter peak usage on a minute by minute basis and control meters remotely. The power companies here have everything they need to charge for peak demand already, they are just too lazy to start it and why should they when they already make their millions?It's just more gobble-de-gook from a government who's in bed with the coal and mining companies. The coal companies are the ones who benefit if more stations are made. Even off line, these stations consume large amounts of coal just being on standby, waiting for peak demand, whether they are actually required or not.

Kim from Perth :

Gary Dean of Brisneyland :

17 Jan 2014 11:19:44am

OR, we could simply create a separate metering system for ACs, something along the lines of 3phase power and hot water systems. If AC is installed the power used is measured through its own meter. Increase that cost to mirror the cost of the unique wiring and meter and "presto".

OR, we could start to begin to understand the importance of quality "planning systems" in our cities. Reduce the use of concrete in the concrete deserts that we've created. Fewer roads, more cycle paths utilising porous pavement systems and more cities, smaller.

Planning is as important to life as Law. When we start to begin to understand this, we'll life more comfortable lives. Until then it seems it'll always be about 'peak power' and that 40hrs per annum is simply that. When the power use hit its highest peak and was equalled across 40hrs. So what?

Gary Dean of Brisneyland :

19 Jan 2014 9:41:47am

Exactly and eureka! I personally spoken to beneficiaries of the 'Pink Batts' who state that life has never been cooler inside their homes.

Productive, opportune and a master-stroke of genius. Now, all we need is for the ABC to acknowledge Kevin Rudd's heritage. ABC News24 Breakfast bringing relevance to the Nation, hhmm, not very likely. Wherever would they fit the never-ending book reviews, movie reviews and music reviews if they had to produce newsworthy items?

misscatherine :

18 Jan 2014 9:15:53am

A separate meter! What a great idea, the user pay an appropriate rate for their aircon use. Should be for businesses too not just domestic use. And those without the separate meter would not need to subsidise peak power. Some homes already have a separate meter for hot water that are not used, perhaps the redundant meters could be converted for aircon.

NevinEsk :

16 Jan 2014 10:54:59pm

How about getting some investment into pv storage systems for domestic use. Currently we have the surplus generated into the grid and without that the power companies would be cutting power everywhere. However if we had decent storage at home then it would cut the cost of the distribution system maintenance as it would make do with the current wires and trannies.

Mike loves his AC :

16 Jan 2014 10:34:31pm

this article is not very accurate at all -my parents got AC run their AC for many hours at a time we got an inverter Ac unit & only run it for short periods -it really helps reduce the heat load makes summer bearable 7 getting that Ac is the best thing Ive ever done -secret to its use is use it in short burts& back it up with ceiling fans -really reduces costs and makes the summer bearable -want a tip -have an Ac installed -you will never regret it if we all were given a roster for use we wouldn't need to shed loads power companies should get with the modern world and do something useful for once

Bernadette George :

16 Jan 2014 10:20:11pm

The great irony to this story is that, if houses were designed for passive energy efficiency in the first place, and were flanked by big enough garden surrounds to at least accommodate a deciduous tree for the western side, not to mention verandahs all round, there wouldn't be a need to switch the air-condition on at all.

Funny how what is old is better than what is new these days - i am talking, of course, about those lovely "Queenslanders" with 18foot ceilings, high set louvre "fan lights" verandahs all round and elevated off the ground just enough for good air circulation, or plenty enough for a decent flood on occasion! Of course, in southern states 3m / 10ft ceilings are more appropriate, along with lower set floor levels (to keep warmer in winter - the earth being warmer and more stable than air temperature) but the surrounding of trees and at least expansive back and front verandahs are still essential.

Except, of course, the developers have convinced "everyone" that air-con is a luxury (rather than a blatant, cheap and nasty design flaw, whereby builders and developers make the short term profit and eveyrone else, not just the occupants, pay the recurrent costs forever after. What we are seeing in the southern States' heatwave right now, is the price we all end up paying when we let the developers and all but dumb buliders dictate what kind of housing most people can have. And, as we saw in the heatwave of January 2009, some elderly will die in their own homes simply because a power outage turns off the air-conditioner. There is much that is deeply wrong with the Building Code of Australia and the planning system as applied in each State.

Sandy :

17 Jan 2014 11:32:36am

Well said Bernadette, I couldn't agree more. I am gobsmacked at the number of new houses I see here in Queensland with dark colourbond roofs. They might look "nice", but man, what a way to instantly heat up your house.

Patrick :

17 Jan 2014 1:01:04pm

Too true. Houses in Australia are so energy inefficient resulting in the need for peak power demand in hot water for air con. When are we going to get serious about house design. It's not rocket science,

Dad :

17 Jan 2014 2:32:16pm

Australia has more than one climate. Where I am inland (36˚ south) is has been over 38 for a week. Yesterday, today and tomorrow it is 42˚ with 10% humidity. Over night it never gets cooler than 28˚. That is normal for this part of the country. My home is fully insulated, has verandahs, 10 foot ceilings and large shade trees. Guess what? None of that makes any difference, AC is the only way to cool the house. No amount of passive design or wishful thinking will change that.

Clancy :

17 Jan 2014 6:45:22pm

Interesting. I live in Broken Hill in outback NSW, a similar climate to what you are describing. I have full insulation and verandahs on 3 sides (sadly not on the northwest due to where house is located on block) and shade trees. I have solar power and aircon but don't use the aircon because it reduces my ability to tolerate the heat. My house does get a bit hot by the end of a heatwave, but cools down after a couple of cool nights. I use fans, a wet cloth on the neck, sleep in the backyard if too hot in the house, and find I do fine.

Chris :

18 Jan 2014 8:47:32am

Well .. you get the award for the most shortsighted comment on here.Clearly by your comment you fail to understand passive cooling/heating & energy efficiency in buildings.Quite frankly, if you don't have an efficient building you could be roasting. If you do have one you could still be hot.The point is, that there is a difference in peak temperatures of the building ... so even if heating or cooling is required it will be required less, will be retained for longer & it will cost less.I am sure we all believe you are in a 4 or 5 star energy efficient rated building .... with double glazing, solar panels, roof cavity solar fan extractors, mudbrick or hay bale wall construction (or equivalent), loads of insulation etc ...Let's not be ignorant .... thermal efficiency & construction energy efficiency are a science.No one is saying you can't use an airconditioner ....If you need an airconditioner to knock 10 degrees of heat off an inefficient building rather than reduce a few degrees of heat in an efficient building ... it will make a hell of a difference to your energy bills & the demand you need.Its not rocket science ... some people deny it like it challenges the laws of gravity.

badtastefatboy :

17 Jan 2014 2:43:53pm

No to mention that during the late 80's, 90's and early naughties the electricity generators and retailers (manly SOE's in those days) subsidised the sale of AC with interest free payments etc. so they could flog off unused base load power from cheap coal fired stations.Of course now we're addicted and the affordability of the units easy better.Problem is no-one want to build power stations these days because 1) uncertainty over carbon price 2)the generation industry is largely privatised these days and abundant wholesale power means, lower price and less profit.

A happy little debunker :

Power consumption this last xmas day was 1/5th normal weekday demand - let alone approaching a peak.

Thats with everyone, mostly - close to home.

The real drivers of peak demand - are the offices, worksites and shopping malls around the country that insist on climate control - all the time.

Whilst many here, are extolling the benefits of solar, it remains out of the reach of the tenants and the poorer of society.

These people, the ones that can't afford air-con, get a massive double whammy - firstly by having subsidizes all the people who could afford solar by way of rebates (and guarantees of prices back to the grid) and secondly by having to pay the Federal government renewable energy target for electricy providers.

This is the law of unintended consequences.

Governments want to deal with 'global warming' and the poorest have to pay through the nose.Meanwhile the middle class (thats you - by the way) get to feel morally superior having looked after you and yours at their expense.

Don't try and 'save' the planet at the cost of the poorest - where is your humanity?

badtastefatboy :

17 Jan 2014 2:59:20pm

You make good points debunker.Solar is a waste of time unless you plan to hook it up to storage and use it when they load shed during peak periods to drive up wholesale price (profit). This has happened before in US and here in SA. The government cuts to 'lead in' tariff have scuttled the value of feeding back to the grid.Most base load power (i.e. power that is available most of the time) comes from dirty coal fired stations. They can take a day to fire up to produce load but are cheap without a price on carbon. Peak load is usual met by faster sources (to fire up) e.g. natural gas, hydro, solar farm, wind etc. Most of the increase in power cost recently has come from maintaining networks (distribution) which is still primarily owned by governments and is maintained to high standards to reduce failures. The State Governments want to flog them off to balance the books and to fatten them up they want to cut back on the network costs under the guise it will reduce electricity prices. We'll see!

richardw :

Solar is normally installed facing north which limits the output to ending in the middle of peak load.

Pointing solar to the west would reduce the kWh return but shift the output a bit towards the peak load time.

Energy Australia has run tests with home based storage units and solar panels and achieved 15% peak load reduction. Don't need storage or panels on every house to achieve this either.

Everything else - yes the network is the issue. The cost of generation isn't.

Cost of electricity generation on average is 4-6c/kWh and the rest is network and retail markup, including a 15% markup to be used as a 15% discount to encourage contracting.

Most of the increases we have had over the last few years are network.

Anyway the good news is that the storage units that were tested are current technology battery units. It's not like the tech doesn't exist. Most people just don't know it exists plus volume is needed to bring price of manufacture down.

Reinhard :

17 Jan 2014 4:46:12pm

HLD , haven't you heard of the Merit Order Effect?.As alternative energy sources grow in the market the wholesale price of electricity drops. The German government identified that consumers saved €840 million in 2010 thanks to renewable induced Merit Order Effect.

Blzbob :

Clancy :

17 Jan 2014 6:49:12pm

I'd like to see power cheaper but rationed - say first 4-5 kwh a day very cheap so even the poorest can afford it without worry, and then very expensive for next 5 kwh and price doubling after that for every extra kwh.

grain grower :

16 Jan 2014 9:30:37pm

why cant we have aircon ? if you want to live in the heat go back in time and live without everything we have now we have a renewable enviromentally friendly power source but know one wants to talk about it. nuclear power is the answer its clean and safe and cheap solar panels are just another rort for people and power companies to make money.i like my cheap evap air con.

Clancy :

17 Jan 2014 6:51:08pm

3 mile island, Chernobyl, Fukishima... The mining companies woud love us to use nuclear, and futire generastions will be left with the mess. Better passive solar design, solar powered aircon, are amuch better option.

Stuart :

choco :

16 Jan 2014 8:35:10pm

Mums used her aircon in the past. Now she has invested in a cheap inflatable pool for the backyard. She is 71. If you don't have a yard for a pool, you could always lay in your bathtub and drink a smoothy. mmm

Gary Dean of Brisneyland :

possum :

16 Jan 2014 7:47:09pm

The Government knew over 40 years ago about the environment and energy crisis.....so lets not make people who are vulnerable to a severe heatwave that hasn't happened before since the turn of the century feel guilty for using air conditioners.

True Blue Ozzie :

16 Jan 2014 7:35:48pm

SOLAR POWER - to every house should be etched in stone and law for any new home built, along with assistance for well established homes. We have to take steps ourselves if we don't the power companies will keep building power generators, making power unreachable for the poor.

I personally don't feel guiltily about hiding in my air conditioned home daily during very hot weather. I received a small payout from a back injury and will never be able to again. I made the smart move and purchased a solar power system, wow it is the best purchase I've ever made. The power we generate covers all our needs and sometimes we get a little back.

Patrick :

17 Jan 2014 1:16:51pm

let's include minumum enegy ratings ( 5star) for houses AND build better house. Your current house might be cheap to build but a nasty inefficient house but bloody expensive to run. Love solar power. Oh a reduce gobal warming.

Clancy :

Peter of Melbourne :

Dino not to be confused with :

20 Jan 2014 9:04:56pm

Oh you poor thing Peter.When I lived in Melbourne I had no such thing as an airconditioner.Not that I am complaining.It's not like I live in a country where people live in the desert where it gets much hotter. Or the tropics where there is high Humidity.Stay there, don't get up I'll change the channel on the tele for you mate.Just sit back and relax.Sorry to trouble you.

CB :

16 Jan 2014 7:11:46pm

Best one I've used was when I lived in Cairns. You could opt to have your heavier power users (HWS, aircon) wired to a second circuit which the electricity utility could turn on and off remotely so that they could spread out the demand to suit themselves, and they guaranteed power for a certain percentage of time. The HWS had a minimum storage capacity set so you wouldn't run out of hot water. We also had a substantial discount on the power bill.

thirdtimelucky :

16 Jan 2014 6:56:20pm

This would never have happened if electricity was regarded as an "essential service" and not privatised. The need, and the drive for profits from the private sector still costs the consumer much more than it might have, through keeping electricity wholesale AND retail under the auspices of the various state governments.

Isn't this the same as what happened to water costs per household, after water was privatised? Another essential service sold off for profits. The same is happening to rail services in Queensland - soon to be 100% privatised, and drifting out of reach because of the need and the drive for profits.

Privatisation is the scourge of the 21st century, and it is not limited to governments of the right, left or centre variety. It was designed so the the "user pays" maxim could be implemented, but as your article so clearly points out, that is not the case. Even if you DON'T use the service, you are still paying.

Here's something from yesterday's ABC news: "Tony Shepherd, in charge of finding federal budget savings has refused to rule out the privatisation of key assets and said no government programs would be quarantined."

I guess we should all prepare ourselves for more of the same - this is not going away, and it is not getting easier. Some things should be classed as essential services and immune from privatisation. Health is next.

Skeptic :

Jim of Strath :

16 Jan 2014 6:45:28pm

I work from home and run an air conditioner all day in weather like this, so I suppose that makes me taker. I live in the country so my petrol taxes subsidise public transport. I am totally independent with rainwater so I subsidise all those drawing mains water. If you want me to make concessions for my air conditioning and power use I want the concessions applied across the board please.

Patrick :

Komadoman :

16 Jan 2014 6:32:45pm

I think we are too focused on the symptom - a very hot house, and missing a key root cause - poor house design. I am amazed by the idiotic design of new houses in my suburb of Thebarton. The older houses like mine were designed and built in the time before airconditioning when a simple fan was a luxury. My 1913 house has eaves and gables with venting that allows the hot air that inevitably collects to escape. It also has vented walls to help prevent heat buildup. We have been comfortable over the last week of 40+ Celsius with a small (1.5kw) refrigerated aircon and a small floor evaporative unit. We have only needed to run the refrigerated aircon from 11:00am to late evening. Down the street some genius bowled over a house like mine and erected a modern 'federation' style house with a completely sealed roof space and a charcoal grey steel roof. Their massive aircon unit has been going flat chat 24*7. That is the problem - inappropriate ans unsustainable housing design regulations, please do a piece on that so we can learn from history.

greenspider :

16 Jan 2014 6:32:26pm

There seems to be a lack of basic education in some quarters. Our weather forecasting system for the 24-48 hours is extremely accurate these days, so we KNOW whether there is going to be a day coming which is hot enough to warrant switching on the air-con.

If I boil an egg and wish to cool it down so I can eat it, it will not do me any good to put the egg under hot running water. Same with air-con. If my house is 30 degrees indoors and I wish to cool it down when it is 40+ degrees outside there is no point running the air-con then. Most air-cons have radiators which are supposed to dump excess heat outdoors. but if if the air outdoors is about as hot as the radiator, I will get little or no cooling. Thus the air-con has to work harder, achieve less and cost more.

I check the weather forecast, and if the day is likely to be hot I run the air-con at night /early morning when it is cooler. (a) it is much more efficient and (b) if I am on a multi-level tariff which charges me less for power consumed off-peak, it saves a bucket load of $$$.

There's a world of difference between cooling down a hot house and preventing the house getting hot in the first place.

Patrick :

Tom :

16 Jan 2014 6:26:09pm

All the comments are spot on here. In the US electricity has a demand charge (max power used) and an energy charge (overall consumption) which encourages lowering your peak consumption. This is a much fairer method which Australia should adopt. The way we bill electricity hasn't changed in 80 years.

greenspider :

16 Jan 2014 6:16:02pm

Part of the problem seems to be the "double dipping" into the power network brought about by the increase of shopping hours to weekends and later in the evening. During the working day many (but not all) people are away from home, in places of employment with power consuming assets such as elevators, air conditioners, computers etc. Those houses, being empty, consume much less power, and if they have renewable generation capacity, this nearly all goes into the grid.

However with the increase in shopping hours, places that would normally be closed down are open, and supermarkets etc are still consuming power for refrigeration, lighting, etc, while many families are at home, say on the weekends, with cooking, air conditioning, computers, etc, so whilst SOME members of the family go shopping, others stay at home. Extra electricity is being consumed, which would not normally be used. Then the supermarkets etc have to remain active, thought closed, for stock replacement.

And of course, with the increase of night shopping, there is no extra generation from the solar sector. Plus things such as security lighting.

And the reason this happens? Shopper convenience! And profits for the shops who can write off the extra power consumption against their tax. Perhaps if we made electricity less of a deduction against tax, there would be an incentive to reduce consumption.

SaveIt :

16 Jan 2014 6:14:18pm

Demand Side Management whether by simple "time of use" kWh pricing penalties, or by kVA Demand charges, are vital to smooth Australia's awful load profile and bad Power Factor.

Dissenters to DSM will then surely find the User Pays, not the guy sweating it out next door, and even people granted extreme Solar Feed In benefits not available to new greenies, may get a small hit !

Of course Green Buildings are the way to go rather than our flimsy low admittance structures, as despite being in the Industry my new house will have NO AirCon, but I wont be sweating it out!

The greedy unregulated Industry is 30 years behind Europe and getting worse each day.

Travis :

16 Jan 2014 5:49:57pm

While I agree about installing Solar Panels to help, and is one of the reason why I installed 1.5kw system at home. The problem is that peak load/demand tends to come in late afternoons into the evening, when solar panels are typically less efficient or not generating power.

They are definitely part of the solution, but unfortunately not all of the solution. Perhaps more investment into alternative sources such as wind, wave power etc to broaden the supply base.

rockpicker :

16 Jan 2014 5:32:53pm

Of course and most of this will be from suburbia. I live in a fairly hot place and I use air conditioning in one room and an evaporative cooler which uses about 200w. Much of this problem comes from the approval of highly inappropriate designs with no shade and no eaves. The maligned pink batts made a difference, but even basic home insulation is not done in a logical way. Also malls that use refrigerative cooling could well set the thermostat higher. Even setting the A/C to a comfortable rather than a frigid level would help.

Skeptic :

17 Jan 2014 2:16:07pm

Setting my A/C to 24 degrees is just fine on a day when it is 40 outside. Your point about shopping centers is a good one too, but I wonder if it is as simple for them to change the temperature as it is for me?

Blaktop :

16 Jan 2014 5:15:37pm

How about a surcharge on "luxury" power using items such as A/C. I don't have A/C, I do what people always did, I deal with it......and before you give me the "what about the elderly/kids etc etc"......I'm 60 and have spent most of my life in the hotter parts of the country. Why should I have to pay extra for the service charge so they can build new power stations to run things I don't have (by choice).

Gary Dean of Brisneyland :

19 Jan 2014 10:03:08am

Blaktop is exactly right and you should be upset at having to pay higher insurances premiums for other peoples misfortunes. If correct Planning Procedures were in place, it's likely that no house in Australia would ever be lost bushfire.

Have your AC as your family requires it, but asking Blaktop to help pay for it is nothing more than creating a false economy.

Yes communities do need to contribute but it's all about correct contribution not corrective.

Peter of Melbourne :

18 Jan 2014 1:41:20pm

Why should I have to pay higher taxes to support "your" seniors card. Or do you like the idea that our Government health and welfare services operate on a successful socialist footing (but only for the services "you" currently require!"

deedee :

16 Jan 2014 4:43:07pm

House design can do a lot to mitigate large extremes of temperature. I live in a house that is 23 degrees centigrade inside right now, while it is 40 degrees outside. I have no airconditioner. Verandas all around, pitched roof, super insulation, strawbale walls, double glazing. I open everything when, or if, the temperature drops below 25 at night, and close up early morning. In Feb 2009, the last time of extreme temperatures, my house never got hotter than 26 degrees, on the day of the fires.

will :

bob :

16 Jan 2014 9:30:07pm

I would have liked a nice insulated concrete floor, haybales and all that nice stuff, but I couldn't justify the $10000 it would have added to my $20000 house. Instead I spent the money on solar panels and a big battery (20 year minimum life). Now I have aircon when I need it (a small one) and in winter I have excess solar so I can charge my batteries on a cloudy day. The moral of the story is that their is more than one way to skin a cat.

deedee :

Consideredview :

16 Jan 2014 10:14:54pm

Fantastic, I would love to see more emphasis on sensible design for our climate, and smaller houses with more verandahs are great.Perth now has the dubious honour of having higher average house sizes than the US, and the largest houses in Australia.Dark roofing is the fashion, as is no eaves, and west facing windows to get ocean views - double glazing is a rarity.And what do regulators do - nothing! Might upset the developers who back local government and pay for election campaigns!

Bernadette George :

16 Jan 2014 10:24:48pm

Well said, Deedee.

i would love to see teh ABC 7.30 or 4 Corners do a proper feature on how easy it really is to design for passive energy efficiency, not forgetting about the role complementary landscaping can play. There really is no excuse for all this "going backwards" that has been going on in the housing industry and planning system that has allowed so many new homes to be much less liveable without electricity than even fifty years ago, let alone 100. Not my idea of progress.

deedee :

Peter of Melbourne :

18 Jan 2014 1:48:29pm

Brilliant DeeDee... i went to the homeshow a few years back and a builder had these wonderfully green homes for sale... the only catch was you needed far more than the average suburban block to build them on, they were around 16squares... and a basic build cost over $350,000.00 without the cost of the land included.

Now for around $350,000.00 Porter Davis will build me a 6 star rated 40square house with central hvac to cover all the extremes and every other trimming I could think and not think of. It will cost to run it however people will and do look at the initial cost and make their decisions there.

Your Green fantasy is just that a fantasy. It is time for Government to step upto the plate and build thorium powered powerplants to meet the real energy needs of a 1st world society.

Krista Bell :

16 Jan 2014 4:39:50pm

An argument for alternative energy if ever I heard one. Maybe if the government stop putting the kibosh on this. We would see our power stations further backed up by the sun and air. It coudl even be an initiative of the Power companies to do so! I'd feel better paying for wind energy rather than coal. BUT then I suppose climate change is a verboten word in this government.

PeakOne :

16 Jan 2014 5:49:49pm

You missed the point of the article completely. It is not about how power is generated but about the cost of having to cater for a few short hours of peak demand per year. Be it generated by wind, solar, nuclear, coal or hydro peak demand and catering for it has a high cost. That is the point of the article. Please read it again.

Gary Dean of Brisneyland :

19 Jan 2014 10:27:16am

Krista Bell is right on the money with the article and a fine alternative is offered. The article is about how we ALL pay for the benefits, AC, of some.

Further, it wouldn't be called Peak demand if it became common and the way to create commonality here is as Krista Bell says, backup our (coal-fired, bad for the environment because it's "heating the planet") power stations with sun and air.

Richard :

greenspider :

17 Jan 2014 6:10:50pm

As I mentioned above, check the weather forecast and if it's going to be hot then run your air-con the night/early morning previously. Because the outside air is going to be cooler than during the day, your A/C will far more efficient and use less power, hence costing less. YOur problem is you seem to be letting your house get hot then trying to cool it, rather than stopping it heating up in the first place. Unless you have solar panels, this is always going to be a losing battle.

foxlike :

16 Jan 2014 4:24:42pm

No Australian Government has a cogent, long-term plan for electricity. Flogging public infrastructure to private price-gouging overseas-owned companies is short-sighted, ultimately very expensive, and hardly in the best interests of Australians. One: set the highest green standards for all new builds to minimise dependency on aircon. Yes, you will pay more upfront but save buckets for years to come. Two: require all new builds to include, at the very least, 3kw solar panels, and maintain subsidies to retrofit them elsewhere - and drop all this specious 'subsidising other people' rubbish, we're all in this together and we should be planning for the world our kids will live in. Three: develop an innovative fifty-year plan based on population/energy use, not on profit gouging, and which includes the input from a solar-panelled population. Four: genuinely invest in research for alternative green power overall - including a big prize for cheaper aircon (solar?) or innovative plans e.g.for households to share one big aircon unit. Five: free ceiling fans for everyone!

Skeptic :

17 Jan 2014 2:26:00pm

Just one point - privatization of public infrastructure is not "hardly' in the interests of Australians. It is not, in any manner what so ever, in our interests. The nuts-and-bolts hardware of electricity, telecommunications or water infrastructure should always remain in public ownership. This way it cannot be asset stripped by a private company and there is at least a faint hope that the infrastructure will be properly maintained. A good (or bad, if you will) example was the rail freight network which was privatized in Victoria by Jeff Kennett. During their last term in office the Labor government bought it back for much less than it had been sold for - because it was broken through an almost complete lack of maintenance. The mob running it privately made their pile and moved on.

Peter of Melbourne :

18 Jan 2014 2:03:29pm

Agreed. The privatisation and globalisation policies of Federal Governments of all persuasions over the past 30+ years have not done Australia any long term favours. However we can now buy cheap gadgets we dont really need at exorbitant prices from multinationals who are supplied by 3rd world manufacturing hellholes at the expense of our own industry.

The LNP and Labor have proven to be no friends to the Australian people in the long term however the problem is the only current alternatives are the loony far fringed political parties such as the psychotic Greens and Palmer, no solutions there at all.

rossbozo :

16 Jan 2014 4:09:46pm

What we are experiencing is the downside of privatisation of our electricity generating and distribution infrastructure. As Sara says -"They have very little incentive to help you save electricity.". Private companies make their profit by encouraging us to consume more electricity.

What we are maybe seeing is the start of the breakdown of the business model of power supply. As the Productivity Commission correctly state, the steady uptake of airconditioning is the main driver of power price rises. I live in north Queensland, where solar PVAs are particularly effective. We use little or no airconditioning because we live in a Queenslander house which is designed for living in our climate. But that's another story.

I recently saw some interesting figures on the comparison of rising power price rises and falling cost of standalone power. Admittedly these were for my part of the world. Extrapolating these trends forward in time, in around 5 years the payback period for buying the PVA, inverter, charger, storage batteries and autostart generator will probably be about 4 to 6 years. It presently costs us nearly $300 pa just to have the power pole out in the street, and rising steadily, just to support other people's aircons. What happens to the power companies' business model once half the houses in a street have disconnected from the grid? Also we don't lose power in a cyclone like during Yasi.

NevinEsk :

Roger :

16 Jan 2014 4:08:40pm

A few years back the water shortage in Brisbane and surrounds resulted in the Water Board asking people to use less. The result was overwhelming success. So much so that the Water Board INCREASED the price of water because it started to lose revenue from decreased demand.

greenspider :

16 Jan 2014 4:08:04pm

I have a small portable air conditioner (refrigerated) which at peak draws 1,200 watts. This means that if I have no renewable energy (solar panels) I am drawing this power from the grid which (a) consumes more generation fuel (non-renewable) which (b) emits more greenhouse gases and (c) puts more strain on the infrastructure.

However, if I have 1,600 watts of solar panel capacity on my roof, that means my 1,200 watts cooler is consuming that power, feeding back only the excess 400 watts into the grid for other consumers to access. This (a) reduces the amount of non-renewable fuel needed to be consumed by the generator, (b) reduces the amount of greenhouse gas emitted and (c) reduces the strain on the infrastructure.

However, the reality is that in fact some of that 400 watts of excess power is being consumed by items in my house other than the cooler - fridge, TV, computer, etc. Further, I am able to store some of the excess power in my battery bank, so I can use it overnight or when the grid is brought down, say by something like a fire, to keep my freezers running.

The problem does not lie with the renewable generators, but rather with the lack of forethought and planning by governments in the past, wasting money. The WA Government is currently planning to spend $300 million on "refurbishing" the Muja (non-renewable) power station, with absolutely no guarantee that it will get value for money. Why not spend the money on upgrading the infrastructure to actually integrate renewable energy instead of trying to pin the blame on the renewable energy sector, and tax those people who are actually preparing for emergencies and trying to save money for the whole community?

Peter of Melbourne :

18 Jan 2014 2:08:49pm

Better $2 billion to $3 billion or so on a nuke plant which can supply most of WA's energy need for the next 70 or 80 years.. and hey look we have yellowcake which can be processed into fuel and we also have thorium which can also be processed into fuel. Far more cost and energy effective than buying pv panels for WA's residential, commercial and industrial needs plus the simple fact that solar/wind/tidal cannot meet those needs. Then again maybe everyone should live your life because it suits you.

Sonny Bill :

ken bull :

16 Jan 2014 4:00:09pm

What a disgrace that half of the homes in Australia use air conditioning. With all the accumulated knowledge about green technology, insulation design and technology available we depend so heavily on these energy/resource chewing monsters. There is so much wealth in this country with so much stupidity driving it . "Primitive" adobe huts throughout the world insulate beautifully and put to shame the Macmansion; I know in which I'd prefer to live. Peter Garret's plan to retrofit Aussie homes with ceiling insulation was basically sound, even though it fell over due to the greed and corruption in the sub-contraction process.

greenspider :

16 Jan 2014 6:23:31pm

I have insulation batts in my ceiling (which I installed myself), a patio on the western side of the house, a tile roof shaded by solar panels and solar hot water system, external shade cloth blinds, double glazing in windows and doors - but given the change in the climate, not only has the temperature (in summer) increased its maximum, but the number of days of high temperatures in a sequence has increased, so even with the best insulation, the heat still gets in - it just takes a couple of days longer. I live in the Hills behind Perth and on bad days it can max out at 44-45 degrees for 4-5 days running.

Air conditioning is not just a matter of comfort - it's a matter of health and safety. However, I have sufficient solar energy generated during summer days to almost entirely cover the cost of keeping my house cool.

Of course, in winter, I have absolutely no necessity to warm the house.

Tony Smith :

16 Jan 2014 7:20:47pm

You got it in a nutshell, Ken! Couldn't agree more; hopefully there are scores more like you and me that 'maybe' our politicians just might wake up to themselves-especially the Libs. who really don't seem to be doing very much of anything re this problem so far!Its so obvious what needs to be done, so where are our "leaders' when we really need them? Right now, their solution to the problem will be a quick 2or 3 at the Local! I don't blame them, but this would seem to be the best that they can come up with, at this point in time.

No hope for humanity :

16 Jan 2014 3:52:56pm

In response to: "The risk is that if the latest proposals to reform the energy market get tangled in bureaucracy the elderly, the young and the infirm will be at risk as the electricity grid struggles to cope. " 'Cost reflective pricing', 'time of use pricing', 'flexible pricing' or what ever you want to call it will hurt these vulnerable people arguably more than an occasional power disruption. The parent at home with a baby; the retirees - only a hard nosed electricity retailer would consider it a good idea to penalise them for being at home with the air con on.

ermahgerd :

16 Jan 2014 8:19:04pm

You mean people having to pay for something they want? Oh the humanity! What about those of us who work outside all day, supporting those who don't work? I wonder what people do in poor countries do on a hot day? Probably what they do every day - go to work in their non-airconditioned factory for 14 hours assembling cheap air conditioners for export to Australia.

Philosopher :

16 Jan 2014 3:47:45pm

Those with solar power actually subsidise the ones without solar power. Essential Energy actually tries to stop solar power installation over 5 Kw and they do it by nefarious means. They use voltage high rise fluctuation limitations in rural areas to limit the power generation. It is a con. All rural areas could install 10 Kw solar and more than over the usage. We are misled by politicians and the power companies and unions. It is about time we got active and dealt with them.

wollsue :

greenspider :

16 Jan 2014 6:05:32pm

"Those with solar power actually subsidise the ones without solar power"

Spot on. I don't receive any of the Feed-in tariff from the government, so I'm not being subsidised by the taxpayer but vice versa. In Western Australia, I sell my excess power back to the utility, and they immediately on-sell it to their other customers. Sounds good except - according to my power bill, I have to sell my power at just under $.09 per kWh and the utility resells it at just under $0.48 per unit. Their generation cost - zero. Profit $0.39. This high price is charged during the "peak" generation period, which is when the sun is shining the most.

Cee :

16 Jan 2014 7:01:30pm

Actually, those without solar subsidise who can afford the capital investment to install solar panels. The cost of subsidies in capital cost and in tariffs are shaheed by all taxpayers and electricity consumers respectively.

jc :

16 Jan 2014 3:46:21pm

I will preface this by saying i have solar on my roof and will argue tot eh death its something that should be compulsory on every new house built in australia...but for those arguing that we all need to have solar to fix the power problem are missing the point. Peak power demand isnt usually at mid day or 2pm. Its later in the day as workers return home, find their house hot, and crank up the air con. Late in the day your solar system will not be producing the same amount of power. So...during the day the power plants dont need to work too hard as we have solar on our roof....and then they need to meet peak demand. Unless you have a battery backup system your solar wont be helping you much at 5-6-7pm. To take it further - stand and watch your solar system output screens on a partly cloudy day. Notice what it reads when the sun is out, and how quick it drops when a cloud comes over. Imagine what that is doing to the network. Look into how they needed to radically alter the Power plant in the town of Carnarvon WA due to the massive uptake of solar. Yes solar is part of a solution, but as much as I love mine it is part of the problem....yes a problem the power generators need to live with and adapt to, and its the adapt thing they have failed to do. But arguing we all need to put solar on our roof will not fix the problem unless you also ad a battery backup....come 6pm and you are still hot the system wont be helping much.

AJ :

16 Jan 2014 7:58:10pm

You touch on a good point JC. I work as a mechanical engineering consultant and people tend to set their A/C far too low when they enter an unconditioned environment. The trick is to slowly bring the room down to the desired temperature by setting a timer to start the system an hour or so before the room is going to be used. Basically the power drawn by the compressors and fans in an A/C system is not linear; a 1 degree reduction in temperature greatly increases the energy consumption.

Paul :

Consideredview :

16 Jan 2014 10:20:46pm

That's why people are asked to set their air con timers to start the air con at a low level, half an hour or so before they get home from work - so the don't have to crank it up.Also, what about all the ways of making a home so much more energy efficient - have a smaller, lovelier home with more space to plant deciduous trees on the north, save power and see the people you live with - too easy!

Fleximilious :

16 Jan 2014 3:23:19pm

One needs to put the investment in electricity plant in to context. Virtually all of our public infrastructure remains under utilised for a large percentage of time. You can apply this to roads, railways, airports, hospitals, the list goes on. It is not just public infrastructure that suffers from this malaise, also private investment. Think of the number of cars and houses in our communities that are infrequently used. Think of the agriculture equipment that is utilised once a year at seeding and harvest time. Some of the equipment that I have just mentioned would likely be worth much more than a few electricity generators.

Ben W. :

17 Jan 2014 5:16:14pm

I think this is a good point. We have this large electricity infrastructure tailored to peak demands because that's when we want it most (i.e. when we all badly want cooling down do we can remain functional human beings rather than wet flannel covered meat sacks!). In that regard, it's an entirely expected outcome, and one that isn't unreasonable.

For this reason, I don't think it's unreasonable investment in infrastructure - we get something out of it (even those who only use fans). As the comment I'm quoting says, there are other more effective ways to reduce inefficient investment in infrastructure in society, if that is your goal, and they can be targeted at things that are luxuries, rather than at using electricity to stay cool when it's hot, which seems to me to be a pretty basic human desire.

Dale :

16 Jan 2014 3:21:11pm

Assigning the "blame" to households for using resources s bullshit. Much more power is used for air-conditioning of businesses. This is proved by looking at power usage on non-working days that are hot e.g. Christmas Day when very little business is operating. Apparently the death of a few vulnerable members of society is the cost we must pay to cope with peak load as we can't ask business to swelter or provide maximum capacity.

Grant :

JA :

16 Jan 2014 8:03:32pm

Not really Grant, A/Cs are heat pumps, moving heat from one area and dumping it in another (e.g. taking heat from a room and dumping it in the atmosphere). Sure there is some heat generated due to fan and compressor friction but it's negligible compared to the heat generated by electricity production. I'm no expert with solar panels but I don't think they generate much heat (especially when compared with coal or gas fired generators).

Nicky :

Launcestonian :

16 Jan 2014 8:57:25pm

I'm not sure that it balances out exactly, but I suspect that this is somewhat accounted for by being the energy from the sun that solar panels absorb and transfer to the AC systems, energy that would otherwise hit an ordinary surface and produce heat. That said, I'm no physicist.

greenspider :

17 Jan 2014 12:19:34pm

One must bear in mind that much of the (apparent) heat produced by a refrigerated system comes from transferring energy (heat) from one location to another ie inside the house/refrigerated cabinet to the outside. Some heat is generated by the motor running the compressor, from electricity being converted into mechanical work, and can be a measure of the efficiency of the system.

This electricity is either generated from the burning of fossil fuels, which releases energy (from sunlight) trapped millions of years ago, and therefore adds to the current heat load in the atmosphere, OR it can be generated renewably by capturing solar energy as it arrives on the earth's surface, which adds little, if any "extra" heat to the atmosphere over and above what would come from the sun in the normal course of events.

New World :

16 Jan 2014 3:05:54pm

Regarding peak power demand.

Peak power demand occurs in winter also, so power supplies need be good enough to provide peak demand in winter also.

Inverter air conditioners heat rooms very efficiently A good number of people but the radiator style of heaters that consume 2400watts per hour. Air Conditioners run at a third of the radiator heaters which many people have.

Electric stoves use more than three times the peak power of air conditioners. electric stoves will demand around 6500watts peak during cooking.

So during winter when people are cooking on their electric stoves and using the radiator style heaters peak demand of Electricity is being reached. Power stations have to be able to provide power in winter as well as summer. So saying the grid is having problems now in summer says that winter power supplies is also a problem. You have to cater to people in winter as well as summer. So the generation capacity needs to be in place to cater for peak demands even if it only for 40 hours out of the year .

Simoc :

16 Jan 2014 6:00:53pm

Why can't people cater for themselves New World. Get a quiet generator and do the peak thing. Its pretty dumb building infrastructure for 40hours of demand. Let peak generation fail and then people will smarten up.

But of course politics gets in the way. The whole Snowy Mountains project is a peak electricity device which can come online in less than a minute.

New World :

Steven :

16 Jan 2014 2:46:45pm

The issue of Peak is a strawman set up as an excuse for private companies and governements not to do the mandatory infrastructure work required.

Everything that is correctly engineered is built with peak in mind. The drainage system outside the hosue is designed for a 1 in 100 year rainfull event and may not get used at its full capcity for many years. You want the council to save money by putting in drains only for the average rainfall event. Roads and public transport systems are also designed for Peak, they are probably only used at full capacity for 6 hours a day and unused for 8, want a public transport system designed for average use. Same situation with water supply, could save money with a piping system that only allowed one tap to be turned on in 5 households at time. On average would be OK but dont shower and have the bloke next door flush his toilet.

Also have to look at the reason for peak. It is because our working day is structured around working during the bulk of daylight hours and thus most of us have to get ready to go to work/travel/ clean/up eat after work at around the same time and are only home during the same hours. Want to tell people they have to wait until 10 pm at night to cook tea, vacuum, put on the washing machine or to shower. Or alternatively they can only cool the house when they are not home.

If you apply peak charges, then like everything it will be the poorer sections of our society being forced to undertake these activities. The well of will pay a bit extra while the less well off eitehr have to go without or suffer inconvenience and hardship. However the electicity generators will be happier because they dont have to spend the money they should and that all other service providers have to.

Pranktologist :

16 Jan 2014 7:45:15pm

Education is the key. (Try THEIR house/apartment) Too many people do not understand the science of green house gasses which, I'm afraid is an outcome of a dumbed down education system, particularly in the maths/sciences area.

New World :

16 Jan 2014 1:58:48pm

I have two1.5Kilowatt Inverter Air ConditionersI have a 3.3kilowatt Solar SystemI have a 2.3kilowat Solar System

The 2.3Kilowat Solar System since the first of November 2013 has produced 980kilowatt hours of power.I have exported 640kilowat hours of powerThe house has used 340kilowatt hours of power the solar system has producedI have imported 555kilowatt hours of power

During the days when I run an Air Conditioner The house uses around one kilowatt in an hour and gets less as the desired temperature is reached in the house. As the day goes on the power from the solar system becomes less but the house power consumption is still covered most times by the solar system.

Air Conditioners and Solar Systems work well.

Innovation will come to store the extra power put into the grid from the solar system to help solar systems store power for night time use. It has only been four years since Solar Systems became wide spread in Australia. Innovation will improve renewables so fossil fuels are conserved.

Innovation will help peak demand peaks by employing new techniques that use renewable power.

New World :

I got home at 5.30pm the other day. The temperature in the house was 31degrees Celsius. I turned on the computer and started the program that monitors my house usage and the Solar Power production.

I started both Air Conditioners. The Solar Production from the 2.3 kilowatt System was 1300 watts.The house power about 4 minutes after starting the Air Conditioners peaked at 2600watts, this lasted for half a minute. Over the next 20 minutes the power usage by the house decreased to 1000 watts, the house temperature was 25 degrees Celsius and the Solar power was putting out 900watts. The Solar Systems puts out power till about 7.30pm When the house power use had decreased to 650watts.

A 2400 watt Electric Kettle or a 2400watt Radiator style heater used in winter pushes peak demand up higher than my Air Conditioners. You should see what the Electric stove does.

New World :

19 Jan 2014 9:23:14pm

Many years ago I experimented with many different ways to cool the house down. They were not successful. Sleeping in the heat was atrocious. Our life has always been that of a low income earner. When split system Air Conditioners came on the market, and they became affordable, the choice was made to be cool in summer, warm in winter, and not have money for any thing else. I chose what I wanted at the cost of doing without other things. To me being able to go to sleep in a cool room has made it all worthwhile.

The cost of heating the house in winter became cheaper than with the radiator heater, because the air conditioner used less power, and the air conditioner is 300 times better that a radiator heater.

Totally Amazed :

16 Jan 2014 1:49:23pm

'.... save your energy-intensive activities for a cheaper time of day.' I can just imagine it. 'Hang on a minute Mr Solar Disc, you are a bit hot right now so please shine on me tonight between 11:00 pm and 4:00 am so I can get cheaper electricity when I use my air con.''... save your energy-intensive activities for a cheaper time of day.' One of the most ludicrous statements I've read for some time.

Frannie :

16 Jan 2014 5:39:08pm

Do you need to use that dishwasher right now? How about that pool pump? Can the load of washing wait? Could you run your laptop off battery for a few hours? Could you use the barbie instead of the oven? How many decorative lamps do you really need running?

LNT :

17 Jan 2014 11:54:40am

Actually, with cost-reflective pricing, these statements make a lot of sense.

On WA's Smart Power tariff, I pay double the usual price at peak times, which is a big incentive to not use energy at the peak, but pay only half the price between 9pm and 7 am, which is when I run power intensive stuff. In our household, over 50% of our energy use in the 'off-peak period and only 10% in the on-peak period.

This helps my family shift our energy use off the peak, evening out the energy demand and as more and more households use this system, we take the pressure of the peak, reducing that 25% of costs that the Productivity Commission referred to in their report.

Historycalling :

16 Jan 2014 1:40:27pm

'The Productivity Commission last year said that air conditioners are largely responsible for putting the electricity network under strain and that strain costs us dearly. Well, the Productivity Commission got it wrong then didn't they. If the electricity network is under strain it is because planners haven't taken into account the increased demand for electricity. Don't blame the consumer for purchasing the product supplied. As with all supply and demand situations, if demand is high then either create extra supply or increase the price. However, given electricity is, or should be, considered an essential supply then make sure there is sufficient to cover demand even in unusual peak periods.A bit like applying water restrictions. Rubbish! Water too is an essential supply. Don't restrict its use, make sure the demand is fulfilled. People bleat about the lack of water in this country. Again, 'Rubbish!' There is more than enough water to supply the entire nation and have plenty left over. The problem is not lack of water but a lack of desire on the part of government to bring the supply to the demand. Governments generally are too busy spending money on nonsensical things that bring them votes and not concentrating on the essential things. A bit of desire would very quickly bring water from the northwest to the southern states. But in WA they are busy spending multi billions on football stadiums (which will be used a small fraction of time) and ‘beautifying’ the foreshore; Victoria is spending billions on a tunnel which, apparently, a section of the community does not want; there is talk of 40 – 60 billion for a high speed rail line in an area already covered very well by air transport which will always be quicker. For goodness sake, pipe a water/LNG mix from the north to the south. The gas will heavily subsidise not only the build cost but also the operating cost of the pipeline and there would be water in sufficient quantities to drown the south let alone supply demand without restrictions. All it needs is someone with vision. People laughed at the Snowy Scheme but look at how well that turned out.

Sparky :

16 Jan 2014 2:54:23pm

It seems you haven't factored cost into any of your arguments! and maybe just a little common sense. I'm assuming your are either very well off or own a coal mine somewhere. A 5000Km pipeline from North to South sounds great but who is going to pay for it, how much will water cost? Have you heard of the Desalination plant, its been all over the news for years. Do you realise Australia is the driest continent on earth...

So if cost isn't an issue for you then you should consider installing a 5-10kW stand-alone PV power system! Then you run your air-con all day & night all summer without ever having to worry about the grid & these power outages.

BTW: All our LNG is being sold to the highest bidder overseas, why would they pipe it down to Victoria? hence our local Gas prices are rising and will continue as we plunder every as much of our natural resources as possible to make a quick buck.

HISTORYFAIL :

16 Jan 2014 2:59:05pm

The Productivity Commission didn't magically come up with an opinion. Do you even know how electricity is generated and distributed?

The consumer is completely responsible for the electricity they use, and waste, and the time that they use it. We have a system that must meet peak demand, despite it only occurring for a small period of time. Google it, it's called a "Load Duration Curve". We have a peak demand problem, and simply blaming the planners for a demand problem that lasts for 1% of the year it is pure selfish ignorance. WE should be planning how we use power, or else paying through the nose for using it in periods where there is huge demand. Our collective wastefulness forces the building of hundreds of millions of dollars worth of infrastructure. Australia, despite being a large continent with high demand centres spread thousands of kilometres apart actually has one of the most stable networks in the world, you can THANK planners for that.

Snowy Hydro? Yeah, it's great! But guess what. Once you dam a river and install generators, that's it! You aren't getting any more power from that river, ever. And in case you didn't notice, during the first decade of this century Australian Hydro Generation decreased. Why? Oh, that's right, we had a drought!

Flicking a switch and receiving electricity isn't some kind of basic human right, it's the result of about a hundred years of technical advancements. So now that we are all addicted to it, don't get your undies in a knot because it's started to cost more.

FYI, since the middle of the century governments have been exploring the possibilities for secure and cheap energy supply. You can look it up in policies released by European Union and the US dating back to the 70s. Guess what, the solution hasn't changed:- Diversify generation- Secure cheap fuel- Transmit efficiently- Manage demand.

ds :

turtlelover :

16 Jan 2014 3:20:35pm

History Calling has missed an obvious point. With water there is an obvious limit to its use. There is a finite amount of potable water available on the planet so restrictions make sense.With electricity supply there is a finite amount of fossil fuels ( mainly) used to create the supply, so restrictions make sense here too. If our electricity supply was created more through solar thermal, solar photovoltaic and wind well yes we could be a bit more free with it.Of course one could apply the Liberal party's economic theories to the problem and just keep consuming until there is a totally stuffed planet and humans all die.

t4g :

16 Jan 2014 3:23:25pm

This comment looks like saying that we should just use everything freely and pay no attention to cost or impact on the environment. That we should just build infrastructure to meet peak demand regardless. This may seem bizarre and thoughtless, but it is what has been happening in some areas, notably electricity supply. The government's own "electricity prices factsheet" (available online) states that "around $11 billion worth of infrastructure across the NEM [the network] is only being used for 100 hours each year". This is a truly phenomenal waste of money and resources. We need both solar (to increase peak supply) and we need demand management (to reduce peak load), in my opinion.

Simon :

16 Jan 2014 3:36:40pm

The snowy river scheme killed the Murray river. Let's do the same to all the rivers in the north of the country so people in the south east can have nice gardens. Australia is the driest continent on the planet. Get out of the city and do some research before calling rubbish!

Consideredview :

16 Jan 2014 10:28:31pm

Thanks! It's exactly this kind of thinking that has created the problems we have now.Time for new ideas!And no one has mentioned wind power. Much of WA has very strong prevailing winds, the area around Geraldton is developing a lot of wind generators, and there has been not a single whinge about "health problems" or birds "dying".

Lachlan :

If planners design networks for these events, people say that they are "gold plating" the network to cope with loads that occur less than 1% of the time. You can't have it both ways.

The real problem is the fact that demand has spikes. As the productivity commission says, these spikes are largely caused by air conditioners on hot days.

As the author of the article says, we need to fix the market so that those who buy lots of electricity when the demand is high pay a suitable price, whereas those who conserve at those times get a suitable reward.

jane :

16 Jan 2014 7:35:15pm

Rather than penalising all energy consumers at peak times, perhaps the charge could be built-in to the cost of the air-con unit, like a tax? Exceptions to the tax could be applied to those who may be vulnerable to the heat....

Neil Davie :

16 Jan 2014 4:39:08pm

Bang on HC, You hit the nail right on the head. It's just like the brain washing attempts to blame motorists doing 20 kph over the ridiculously low speed limits in this country, that are designed to boost revenue from fines gleaned from safe competent drivers. Bypassing the real causes of accidents, being poorly built and maintained roads and an ineffectual driver training method, coupled with giant trucks that are not allowed on the roads in any other country in the world. Like you stated, there is no water shortage in Australia, just a shortage of decent, competent government, capable of working for Australians. An imbecile can see that recovering and channelling the massive amount of water that runs into the ocean from Qld rivers every year, would drought proof the entire Eastern seaboard of Australia. But this requires foresight, planning and expenditure on infrastructure.

Craig Steddy :

16 Jan 2014 5:27:18pm

Then have everybody pay the true cost of the power. Smart meters for everybody. So if you want to use it during peak times then you pay peak generating costs and there is a separate distribution charge that everybody pays that is proportional to their peak usage.

Ian :

revgear :

Time of use charges and dynamic pricing is fair because it reflects the true cost of providing power at the time it is used.

However, demand charges based on peak usage is unfair because it also penalises those who use a lot of power when everybody else is not.

You might have a 6hp spa pump that you occasional use, or an oven that gets used a few times a year. That heater in the guest room might only be used 3 days a year. Unless you use the power during times of peak grid capacity, it doesn't add to the cost of the infrastructure so why should it cost you the same in demand charges as if you were running it 24hrs a day all year?

IMHO, utilities are pushing for demand charges because it is the perfect excuse for the utilities to increase revenue. They know that it will be much harder for the customer to keep an eye on demand all year round, rather than just on those few hot evenings (dynamic pricing). It's like speed cameras or excess charges on mobile plans - it is watching you all the time. All it takes is a momentary lapse and - BANG - you have copped a massive increase to your power bill for the whole year.

Paul Maynard :

16 Jan 2014 1:35:20pm

Installing more home solar panels would help as it distributes the generation capacity thereby the local area supply and the need to increase carrying capacity. The fact that it's solar shouldn't be an issue as the peak loads are also likely to occur in summer daylight hours when the panels are more productive.

revgear :

16 Jan 2014 11:08:08pm

If you have a house with good heat capacity, eg. solid brick, then you can use that as a cheap thermal "battery". Just put a timer on the aircon, to turn it on early afternoon on hot days only when your solar is running strong. Turn it off as soon as you get home. It should be still cool for several hours afterwards.

CitizenWarrior :

16 Jan 2014 3:49:18pm

The Gov protected the Energy Companies by reducing the incentive fo buy solar panels by reducing the amt we receive from our solar panels feeding into the grid; ie from 44c to 8c = the lucky ones that will still get the 44c til 2028 are subsidised by the ones that only get 8c or the poorer still living in State Gov Housing who don't have solar, or the elderly poor who own their own homes but can't afford solar, even if they did it would not pay them; they are the ones that are going to suffer in the future. A very biased system indeed. And what's wrong with installing solar panels on large office blocks? and gov buildings in the surburbs, like street lights and librarys, and public pools; we have such short sighted pollies in this country its a joke.

JD :

16 Jan 2014 4:03:08pm

Actually peak times often occur in the late afternoon when solar panels are much less effective (particularly when orientated to the north) and, depending on where you live, are often associated with hot humid days where the associated cloud cover often reduces the effectiveness of solar panels.

Although the increased capacity of rooftop solar has decreased aggregate demand from the grid substantially, it has only slightly decreased peak demand. As such, increased solar panel capacity has actually increased the relative size of peak loads.

Paul :

16 Jan 2014 8:59:02pm

There is a new breed of solar panels on the horizon, they don't have to be pointed at the sun like the current silicon panels, and they are 60℅ efficient , silicon 20℅.They won't be available for quite a few years but they are coming.

Consideredview :

16 Jan 2014 10:32:19pm

It has only slightly decreased peak demand, you say.And then you say the exact opposite - that increased solar capacity and increased the "relative" size of peak loads.Relative to what? Surely it's the absolute size of peak loads that matters?

David :

16 Jan 2014 4:29:40pm

Water and Electricity are essential utilities but using water on big lawns or having a home at air conditioned to 22 deg on a 45 deg day is not essential and that is why prices increase with increased usage. In my opinion we do need a stronger grid but we also need to be charging more, otherwise we will just keep wasting more of our resources.

Lachlan :

No. The *retailer* pays more if people use a lot of electricity at peak times. This isn't passed on to those consumers who are using electricity at that time. It is passed to *all* consumers.

What is needed is pricing system where people are charged variable amounts depending on when they use electricity. Fortunately, that is what will (eventually) be enabled by the much-maligned smart meters we have in Victoria. However, it is almost certain that those consumers contributing to the peaks will complain bitterly when they start paying their fair share.

David Schultz :

16 Jan 2014 4:42:18pm

I think you'll find that in most states the grid was not privatised. only power sales. Hence the private companies make all the profit and the taxpayer goes on paying for updating and maintaining the grid.

Anthony Caruana :

16 Jan 2014 1:05:55pm

One of the things you're missing there is that the power system is designed to operate under conditions called "credible contingency". The power system is designed to continue delivering a secure power supply (secure is defined by technical measures such as voltage and frequency) even if the system loses its two largest generators.

Also, some consumer advocacy groups have been loathe to recommend/support any systems that might limit power use under extreme conditions. For example, it is possible using some smart meter technologies to limit supply to a home when supply is constrained.

While the points you make are relevant, I think the story oversimplifies a very complex system and environment.

kate :

16 Jan 2014 1:00:15pm

"The risk is that if the latest proposals.... the elderly, the young and the infirm will be at risk as the electricity grid struggles to cope. And the rest of us will cop higher electricity bills."but the flip side is if they manage to spread the pricing more equatibly then the most vunerable will not be able to afford heating and cooling. Best concentrate on building standards to promote energy efficient houses and retro fit government housing.

mhpnet1 :

16 Jan 2014 12:27:48pm

Put some solar on your roof. That way, when you turn the air-con on while the sun is out you're not drawing from the grid. And switch to time of use charging - makes total sense when you think about it.

Frankie :

Shifty Kign :

16 Jan 2014 12:27:35pm

Interesting. After all the privatisation of electricity that was supposed to save us money there isn't enough to go round in the market. Quite ironic really. People are energy greedy though and electricity companies do offer solutions how to cut down usage. Make your kids go without computers & TV for a start you will be amazed how much you save. Teach them how to play scrabble under candle light - thats what we did back in the day.

Robert Dowson :

16 Jan 2014 12:24:51pm

Yes I've heard about one particular plant in the Singleton area, and this one was built just to switch on for peak demand and I was told that was it's purpose and they received top dollar for their input .

Shaun Newman :

16 Jan 2014 12:14:39pm

Those of us who are responsible also install solar power to help to run the air conditioning. A 3kW system of 12 panels will do the job, no problem. For those who say that 'solar' is too expensive to buy, we paid it off over 3 years and saved on our power bill in the process, which helps you to pay it off. Not too many investments you can make that can do that for you.

Adam Chrimes :

16 Jan 2014 2:35:03pm

That is fine if you own your own home. How about all the people who live in rentals, or live in units where they cannot practically install solar? They will be forced to pay top dollar just because they cant have the solar input. Its not a matter of responsibility, but also practicality.

billy :

16 Jan 2014 3:20:24pm

If you were baing paid the wholesale rate for energy supply you would still be paying it off. You were subsidised (massive feed in tarrifs) by me and the rest of the country to install your PV. Many subsidies have been removed because the cost of PV has fallen so rapidly and the repayment time frames are still similar.

thirdtimelucky :

Anthony - I recognise the problem here. The problem is that households using PV power generation, have a desire to sell back to the grid. Isn't this more greed popping its head up?

If PV users stopped bothering with this, the problem would go away ... but only if they were not connected to the grid for "top-up." Kind of like wanting to eat your cake and still have it, n'est ce pas?

B Jackson :

16 Jan 2014 3:06:31pm

I find it amazing why so called power experts say its surprising that Aussie's now use less power. They seem determined to ignore the benificial effects of solar. It appears to be policy issue but why?They are always looking for an excuse to pass on increase costs, even if there arn't any.

Earl de Blonville :

16 Jan 2014 3:11:06pm

This is not true.What is true is that power transmission companies have invested unnecessarily in 'gold plating' their networks and hubs purely in order to get massive government subsidies. Extreme events did not need this massive amount of investment, and there is no truth in this claim whatsoever. Your journalist is either a very poor researcher, has a very short memory or is in the pockets of the power industry. This outrageous tax fraud has been fully reported on in NSW.

turtlelover :

16 Jan 2014 3:25:59pm

Another solution is simply to not be connected to the grid. Our house and shed are powered by a stand-alone wind and solar setup. It was cheaper to put in than to get mains power across from next door. Good power all the time - when others have a power outage we are still watching TV.Its easy. Dont need a hair shirt. The batteries are expensive to start with but they are getting cheaper and more efficient every day.

RETIRED ENGINEER :

16 Jan 2014 3:27:00pm

Solar might seem to be the answer, and it does help reduce demand when the sun is shining. But consider this - on a stinking hot day, you are not going to want to turn off your aircon as soon as the sun goes off your PV panels, and this is the very time when peak demand occurs - late afternoon and early evening, when solar power does nothing to reduce demand.

m nailon :

16 Jan 2014 7:05:02pm

GET OFF THE GRID

A way to get off the grid is to have solar panels power up batteries. If these run out before the solar re-powers them you can recharge the batteries over a couple of hours with a generator. So then you are forever OFF the grid and all its coal pollution.

greenspider :

16 Jan 2014 7:07:14pm

But the demand is going to be there with or without PV, as long as we rely solely on air-con. House design needs to be re-interpreted in light of the change in climate we are now undergoing. Until that time, PV is going to be the right thing.

RETIRED ENGINEER :

17 Jan 2014 4:07:52pm

My point was (and still is) that peak demand is not changed by PV solar. The duration of peak demand may be reduced, but not the actual peak itself (which will be after sunset), and it is the actual peak that determines how much infrastructure the power companies need to provide in order to avoid blackouts or rationing.

JoeBloggs :

Ah I see you have reduced your complaints to that small period of peak demand (4pm to 8pm) when the sun is no longer shinning on the Solar Panels. Do note that in Sydney (EST) sunset is at 8pm today.

Any concerns around voltage fluctuations and reversed electricity flows have relatively simple technical solutions. For example Horizon Power already uses "generation management devices" that control and/or store the electricity generated from solar systems. So that stored Solar energy can be used during peak demand periods when the sun is no longer shinning on the Solar Panels.

A clear benefit of rooftop solar is that it is reducing peak demand, and it is also deferring or avoiding future grid upgrade costs. A separate research report commissioned by the electricity industry last year estimated this at roughly $300 million to $528 million in present value.

Easy Money :

16 Jan 2014 7:43:50pm

Unfortunately it is not so simple.If (like me) you are at work all day and come home in the evening (when there is no sun) you cannot benefit much from solar panels. The derisory 7c a unit feed in tariff they now pay for your solar power (to benefit others) makes it a very poor investment.

greenspider :

17 Jan 2014 1:36:24pm

It's not simply a matter of a derisory 7c a unit feed in tariff, there is also the amount of money you save by NOT consuming power. If (like me) you work at home, and want to keep your house cool, then if you have solar panels, as I do, run my air-con all day and still export power back to the grid. My spreadsheet indicates that, on a good day, I generate up to 16 units per day, export between 6-8 units per day, yet have my air-con running full time. So 10 kWh (at $0.47 per unit, peak) is just under $5.00 per day I'm saving. Plus selling my excess at $0.08 each unit - just under $0.50.

And when it's 44 degrees C outside (I live in the Hills behind Perth) the house can be at 24 degrees.

JoeBloggs :

20 Jan 2014 10:27:08am

Easy Money,

So... don't invest in a solar panel then if you hate them so much.

Meanwhile others who do work/live/raise kids at home and who do use household power during the day when the sun is out can benefit enormously from having their own source of energy production, and if they are wise can even earn a little by selling excess energy back to the grid.

Personally i'd love to see solar panels on all houses as a simple way to reduce the need to produce so much energy from using fossil fuels. Which of course is one of the very good reasons for encouraging the use of solar systems.

After all what is the cost of continuing to use only fossil fuels to produce energy over the long term?

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Sara Phillips

Sara Phillips has been an environment journalist and editor for eleven years. Learning the trade on environmental trade publications, she went on to be deputy editor of 'Cosmos' magazine and editor of 'G', a green lifestyle magazine. She has won several awards for her work including the 2006 Reuters/IUCN award for excellence in environmental reporting and the 2008 Bell Award for editor of the year.

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